Social enterprise and infrastructure morality

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Photo Credit: Kathleen Bence via Flickr Creative Commons

I’ve been looking for a good definition of social enterprise. The information overlords at Google and Wikipedia suggested this:

“A social enterprise is an organization that applies commercial strategies to maximize improvements in human and environmental well-being—this may include maximizing social impact alongside profits for external shareholders.”

That’s a pretty broad and somewhat unsatisfying definition. I mean: “What organization in the 21st century wouldn’t put human and environmental development, social impact and profit high on their agenda?” – (He asks naïvely.)

Infrastructure professionals think a lot about social enterprise, but in a slightly different way. There is of course the unrelated term “social infrastructure,” which broadly covers public services such as healthcare, education, leisure and other government services. But really what we think about when it comes to social enterprise is “infrastructure morality.”

We do not use those exact words. Instead, we talk about the affordability of infrastructure, its social benefit, its impact, economic development, and access to essential human services. We aim to improve the morality of infrastructure through programs under an equally diverse set of themes — such as social responsibility, activist investing and greater transparency. KPMG’s latest edition of Insights magazine is dedicated to this very topic.

James Stewart, my colleague – and the chairman of KPMG’s Global Infrastructure practice –linked infrastructure morality with the UN’s Sustainable Development Goals in a blog for GE Reports in April. He wrote: “Nothing touches people’s lives more immediately than infrastructure. A competitive, inclusive, fair and modern society must deliver effective and affordable public services — including energy, housing, clean water, universal healthcare, communications and transportation. As global leaders grapple with the challenge and expense of delivering these services, the private sector has a critical role to play. But public-private partnerships (PPPs) must begin to prioritize a new set of P’s — people, the planet and prosperity. 

A cursory glance at almost any day’s headlines – or more targeted search on Twitter for #infrastructuremorality or #inframorality – will show that we still have some way to go to bring about the desired change.

Even the things we celebrate – such as the Olympic Games – are not without dilemmas. In a blog about infrastructure morality for the Huffington Post in April, KPMG’s Lord Michael Hastings highlighted the forced eviction and displacement of some of Rio de Janeiro’s poorest to make way for this summer’s Games. He asked: “How will history remember Brazil’s Olympic and Paralympic legacy? Will the city thrive thanks to its investments in new housing, Bus Rapid Transit, a new subway line, improved expressways, and a commitment to cleaner waters? Will the city live up to its promises? Or will the sacrifice of Maria da Penha and the hundreds of other families forced out of the Vila Autódromo largely be in vain?”

The issue is not limited to developing markets. With aging infrastructure and fiscal challenges, Hastings noted that even the United States struggles with these themes. The slow recovery of New Orleans, Louisiana, in the aftermath of Hurricane Katrina in 2005, the bridge collapse in downtown Minneapolis, Minnesota, in 2007, and the Gold King Mine waste water spill in Colorado in 2015 are all events tied to themes of infrastructure morality. More recently, Rapper Jon Connor from Flint, Michigan, tweeted in July 2016 that his mother is still using bottled water to shower. It’s been three years since the city switched sources and began supplying its citizens with corrosive, contaminated water containing harmful metals such as lead. The mainstream media may have forgotten #FlintLivesMatter but residents certainly haven’t.

Poor infrastructure morality is at the core of problems like climate change, pollution, inadequate working conditions, overcrowding, and congestion. The causes are often things like inequality, poor governance, corruption, conflict, a lack of corporate responsibility, and mismanaged migration and population growth – to name but a few.

The world is full of problems, and how we develop and manage our infrastructure can make it better – but only if done correctly. Infrastructure is a social enterprise.  As concepts, they have the same core objective and are of the same state of mind. To quote Muhammad Yunus in Marta Milkowska’s 2015 World Bank Social Enterprise Innovations blog of the same title: “Every time I see a problem, I create a social business to solve it.”

That’s a much more satisfying summation of social enterprise than what Google and Wikipedia gave me. It is also firmly aligned to the idea of infrastructure morality. We see problems, and we build infrastructure to solve them. And like a good social enterprise, these solutions need to be affordable, sustainable and for the benefit of all in society.

Editor's Note

Disclaimer: The content of this blog does not necessarily reflect the views of the World Bank Group, its Board of Executive Directors, staff or the governments it represents. The World Bank Group does not guarantee the accuracy of the data, findings, or analysis in this post.

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John Kjorstad

KPMG Global Services

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